by Bryce Edwards

28 August 2008

The finances of New Zealand First (draft)

In light of the recent exposé of New Zealand First’s dodgy donations from wealthy businesspeople, it’s worth taking an in depth look at the party’s financial history. Such an examination highlights the many dubious and unusual elements of the party’s operations, the extent to which New Zealand First is merely a fiefdom for its leader, the high secrecy involved, but also the extent to which the party is actually largely reliant on parliamentary funding for its existence. [Read an early draft below]

Extreme financial secrecy

The high secrecy of the party means that there is little information available about its financial resources. The party goes to considerable lengths to avoid even providing the state with financial information required under the Electoral Act 1993. Even senior party officeholders and MPs haven’t been allowed access to financial details. For example, Tuku Morgan once complained that while he was a New Zealand First MP he was never told what his financial contributions were used for. He said that because ‘there have been no audited accounts, there’s no evidence of how that money was being spent or used’ (quoted in NZPA, 1998j).

And although the party appears to have been utilising an unusual labrythn of mechanisms to organise its finances, senior office holders in the party have professed a lack of knowledge of these basic details. Winston Peters and his lawyer Brian Henry appear to keep all financial information very centralised.

Despite being a crusader for open government and political finance reform, Peters has always been incredibly coy about the finances of his party. Therefore Peters has in fact always displayed a contradictory attitude towards political finance regulations. In 1996, it was reported:

Peters released NZ First’s democracy policy yesterday, saying that with political parties able to handpick MPs through the party list it was important that they were publicly accountable for their finances and internal organisations. But he told The [Evening] Post today that NZ First’s party membership and total income were private matters and would not be released. Nor would the party meet its own policy initiatives on disclosure until they became law (Edwards, 10 July 1996: p.2).

New Zealand First is not unique in this regard. The question of where New Zealand political parties obtain their financial resources from has always been largely a mystery. According to political scientist Austin Mitchell, writing in 1962, the parties have ‘an obsessive concern with shrouding their finances in secrecy’ (Mitchell, 1962b: p.77). Forty years later Jack Vowles pointed out that, ‘The study of party finance in New Zealand has been practically non-existent, because parties do not release data for public scrutiny’ (Vowles, 2002b: p.420). But the case with New Zealand First is undoubtedly more extreme than for the other parliamentary political parties. The recent examples expose extreme obfusication of the party’s financial operations.

This is related to the fact that the New Zealand First party is really just a vehicle for the personal ambitions of its leader, and that leader is a totally control-obsessed ‘owner’ of the party. As Gordon Campbell once wrote, ‘Essentially, NZF functions less like a political party than a fiefdom run from the 14th floor of Bowen House’ (Campbell, 16 November 1996: p.26).

Early financial difficulties

Like most small modern parties, New Zealand First continually experiences financial problems and operates on a relatively low budget. Michael Laws explains in his book The Demon Profession, that when he joined New Zealand First in 1996, ‘the party had no money’ and he believed at the time its ‘ability to raise money… would be New Zealand First’s largest hurdle’ in the election (Laws, 1998a: p.346). The lack of funds meant that the party was ‘unable to afford any polling or attitudinal research prior to the campaign; no commissioned overview, no focus groups, no random telephone polling – nothing’ (ibid: p.363).

It also meant that the party had trouble paying for its campaigning activities – for example, Laws discloses that during the election campaign ‘New Zealand First’s second promotional pamphlet remained locked in a printer’s warehouse because the party had run out of money for its distribution’ (Laws, 1998a: p.368). The party also had a great deal of trouble paying for the party’s ‘Spirit of New Zealand’ campaign bus - which was estimated by Laws to cost about $250,000, and estimated by another party source as costing about $500,000 (Laws, 1998a: pp.348-349).

According to Laws, Peters and the party spent money it didn’t have in 1996. As one former New Zealand First staffer was quoted saying about the campaign: ‘But most political parties push the expenditure to the maximum and look at paying the bills later’ (quoted in Simpson, 19 Nov 1999). In the end, New Zealand First actually managed to spend $1,108,310 (including $250,055 of state funding for broadcast advertising) on the 1996 campaign. This meant that for the general election of 1996 in which it won 276,603 party votes, the party achieved a cost per vote of $4.01.

This relatively high expenditure meant New Zealand First finished the 1996 general election with a substantial debt, which by the end of 1997 was rumoured (but disputed by party president Doug Woolerton) to still be as high as $400,000 (Young, 1998). Part of the debt included an unpaid advertising bill to Grey Advertising for $40,000.

This lack of funds was probably part of the reason that Peters later attempted to sell the television rights of coverage for the 1996 coalition announcement to the Sky broadcaster (Laws, 1998a: p.385). According to one group of ex-New Zealand First party members, the party’s council also sought to pay off the debt by requiring each electorate organisation to come up with $2000 per year (Young, 1998).

Grey Advertising proved to be of continual controversy for New Zealand First in coalition government with National after 1996, as New Zealand First initially had the ministerial post responsible for the government’s drug purchasing agency Pharmac. The New Zealand First minister, Neil Kirton was sacked from Cabinet in relation to awarding a $250,000 contract to Grey Advertising without putting the contract out to public tender. The Audit Office investigated and there was criticism related to the fact that the advertising agency was part-run by a brother-in-law of Kirton’s.

New Zealand First’s financial labyrinth

In the late 1990s, New Zealand First was chased by its main debtor, Grey Advertising, which had produced the party’s 1996 television commercials, advised on communication and strategic matters, and helped arrange its bus campaign (Simpson, 19 Nov 1999).

It was at this point that Winston Peters’ brother, Wayne Peters, emerged as the billpayer and purse-holder for New Zealand First. Grey Advertising sought out Wayne Peters in 1996 for payment of their unpaid bill – a struggle that went on for the following three years, and was reported as ending in a stalemate in 1999. When the National Business Review covered this, Peters refused to answer any questions on the alleged unpaid advertising bills, and in a early version of his later Glenngate mode, he accused The National Business Review of running a ‘tissue of lies’ campaign against the party (quoted in Simpson, 19 Nov 1999).

Furthermore, Peters put out a press release to clarify that the ‘Campaign expenditure relates to the New Zealand First Party not myself personally and it is defamatory to suggest otherwise’ (Peters, 19 November 1999). He stated that ‘New Zealand First has always met its financial obligations and in this case we are simply waiting for some matters to be clarified’. Peters also threatened that ‘I guarantee substantial legal action’ against the newspaper (Peters, 19 November 1999).

The use of trust funds and accounts started to become an obvious feature of New Zealand First’s financial arrangements. In 1996, John Delamere received $8000 from Rotorua’s Whakaue Trust (Edwards, 1997b: p.3). Then in 1999 the Rotorua organisation of the party obtained a $10,000 donation from the Whakane Trust.

When Winston Peters lost a defamation case brought against him by businessman Selwyn Cushing, Peters was ordered to pay $135,000 in damages and costs. There was widespread speculation about who paid the bill. Even then Peters maintained he had no knowledge of the donors to his legal fund. The National Business Review reported him as saying, ‘It was all dealt with by lawyers - I have no idea about any of it’ (NBR, 28 Aug 1998). The NBR speculated whether the bill had been paid ‘with loaned money or his own’ (NBR, 28 Aug 1998). Peters responded by declaring that the debt was indeed paid by himself. Laws later suggested that Peters must have received a personal donation, as the bill amounted to twice Peters’ annual salary.

The question of who held the pursestrings and was responsible for income and expenditure was incredibly ambiguous. In 1996 then party president Doug Woolerton told journalist Gordon Cambell that ‘Corporate donations, if ever they start coming NZF’s way, will also be Woolerton’s responsibility’ as party president (Campbell, 16 November 1996: pp.27). This statement appeared to contradict other accounts of New Zealand First finances being the responsibility of Wayne Peters.

As well as acting as spokesperson for the Peters’ family’s iwi, Ngati Wai, Wayne Peters continued to be involved with the legal issues of New Zealand First. In 1996, for example, he was co-opted to the party’s post-election coalition negotiations team for which he was allegedly paid over $100,000 by the Parliamentary Service. This occurred after Peters made a successful request to the caretaker National Government to make funding available for ‘for professional and consultancy advice not available through ordinary parliamentary avenues’ (quoted in Kominik, 5 November 1996: p.1).

Wayne Peters is not, of course, the only brother that has been involved with Winston Peters in parliamentary politics. Two other brothers, Ian Peters and Jim Peters, have also been MPs. Formerly a National Party MP, Ian Peters stood unsuccessfully for Taupo in 1996 as the New Zealand First candidate. Jim Peters was a New Zealand First list MP between 2002 and 2005. The following year he was appointed Vice-Chancellor (Maori) of the University of Auckland.

Wayne Peters set up the Spencer Trust from his Whangarei legal firm Thomson Wilson, of which he was a partner until 2007. Donations to New Zealand First were deposited into this account, from which the party’s bills were paid.

Local sources of funds

As in other parties, New Zealand First requires its local electorate organisations and their candidate to raise the funds for local election activities and materials. In 1996 candidates were billed $1600 for party pamphlets delivered to their electorates (Speden, 1996c: p.2).

Such costs payable to the central office can amount to many thousands. For example New Zealand First’s candidate for Rimutaka in 1996, Peter McCardle, claimed to have spent $10,353 on his campaign for the seat (Edwards, 1997b: p.3). On top of these expenses, successful New Zealand First candidates have to pay a levy of 5% of their parliamentary income in order to pay central party campaign debts (Speden, 1996c: p.2).

Typical electorate fundraising ventures were sometimes made at the national conferences, where in one year, for example, ‘Framed miniatures of Mr Peters were snapped up for $2.50 and NZ First clocks for a mere $35’ (Bain, 16 November 1998).

Former party president, Doug Woolerton, once outlined how the local electorate activists raised money for elections: ‘Their job is to get out and do little raffles and cakestalls and all the terrible things that build a spirit, and that raise $150 a week. That’s what it takes to get the $20,000 [fundraising target] in the bin’ (quoted in Campbell, 16 November 1996: pp.26-27).

In 2001, it was reported that 'New Zealand First is asking its supporters for a $1 million to fight next year's General Election' (NZPA, 1 Sep 2001).

Value for money

As an indication of the poor state of New Zealand First’s finances, in 1999 the party only spent $216,648 in the election (including $108,332 of state funding for broadcast advertising – 50% of the total the party spent). Of all the parties elected to Parliament in 1999, New Zealand First achieved the best value for its election spending, averaging a cost of $2.46 per vote – which compared very favourably against, for example, the Alliance’s $5.88 per vote.

Likewise, in the 2002 election campaign, the party ran another relatively efficient campaign, only spending $453,888 (including $152,844 of state funding for broadcast advertising) and again achieving good value for money ($2.15 per vote) but also suggesting the party has few financial backers.

In addition to the money that New Zealand First has spent nationally, the electorate candidates have also spent considerable figures throughout the country:

1996: $553,4251999: $348,0062002: $138,8332005: $147,358

Peters’ own spending on his Tauranga electorate has often been the largest single candidate expenditure: $13,799 in 2005 for example – but other party MPs have also had considerable amounts, such as Peter Brown ($16,447 in 2005 for the Bay of Plenty electorate).

[As a candidate, Peters also disclosed a local electorate donation in 2005 of $17,000.]

A small party organisation

New Zealand First’s low financial resources reflect the party’s lack of a substantial extra-parliamentary organisation. Early in the party’s life NZ First claimed to have more than 10,000 members, and Winston Peters often claimed the party was the second biggest in NZ (Scherer, 1994b). However, as former NZ First MP and adviser Michael Laws explained, ‘Like many of Winston’s claims this one also exceeded the straitjacket of actuality’ (Laws, 1998a: p.347).

Laws also revealed that prior to the 1996 general election ‘the party was being inundated with "one-dollar memberships" as potential candidates sought to secure their candidacy selection by enrolling family members, the local sports club and the not-so-occasional random phantom’ (ibid: p.348). It was also reported that NZ First activists in Hawke’s Bay were signing up unwitting students of a Maori language school as party members. A letter was produced in Parliament ‘from the school to prospective students which told them that as well as paying their tuition fees the school had also paid their $1 membership fee to New Zealand First’ (Scherer, 1996d). The small size of the party, together with its minimal $1 membership fees has meant that the membership is not a substantial source of income for the party.

Another part of the reason that New Zealand First has lacked funding is because, in the tradition of the National Party, New Zealand First has taken up the conservative stance against the concept of parties having close and formal relationships with organised societal groups. The party has certainly lacked close relationships with any one social category of voters, let alone organised expressions of social forces in the New Zealand electorate.

Grey Power has at times been viewed as being supportive of the party, and prior to the formation of the 1996 coalition government with National, Grey Power often lent a great deal of support to its leader Winston Peters. However there has never been any formal relationship between the two organisations, and thus it seems likely that any significant funds had been sourced from there.

But the party was not so small that it hasn’t had access to the most professional commercial technologies. In 1993, for example, the party had purchased a sophisticated $10,000 computer database system to utilise for electorate opinion polling information in conjunction with telemarketing (Pamatatau, 16 Aug 1993).

New Zealand First has proudly employed more traditional forms of low-technology, labour-intensive campaigning, which have been successful especially during the early 1990s. That New Zealand First has utilised more traditional forms of campaigning is mainly out of necessity rather than choice, because New Zealand First has been relatively rich in activist resources, yet relatively poor in financial resources. But the use of traditional campaign methods can also be seen simply as a marketing ploy.

There are now a great many other less conventional interest groups that fund political parties. For instance, it was reported in 1997 that the Lion Foundation made donations totalling up to $5000 to New Zealand First in 1996 (NZPA, 8 Mar 1997: p.A5).

In this sense New Zealand First is typical of a ‘petty-bourgeois’ party in that its support is based on small business and upper-working class voters. Consequently the party does not enjoy a good relationship with either trade unions or the business community.

Business support

It seems that because Winston Peters had been ideologically antagonistic towards big business, the party has always had trouble attracting corporate funding. Much of Peters’ personal appeal was based on his crusades against big business – and especially those connected to the so-called Winbox scandal. He had campaigned against the Business Roundtable, prominent businessman Selwyn Cushing, and a number of other businesses. As Michael Laws had argued, by the mid-1990s ‘Peters had burned off possible corporate support with all his various parliamentary allegations’ (Laws, 1998a: p.346).

The Cushing allegation was Winston Peters’ first major foray into political finance as an issue to campaign on. The public allegations began with a comment Peters made to the Australian current affairs programme Four Corners in June 1992. He recalled a two-year old telephone conversation he had had with a member of the elite Business Roundtable (later revealed under Parliamentary privilege to be Brierley’s Selwyn Cushing – who wasn’t actually a members of the Business Roundtable) in which political donations were offered, but turned down by Peters.

Although in the television documentary Peters stated that it wasn’t clear what the businessman wanted in return for the gifts, Peters later added that he was being expected to change his ‘political stance’ if he took the funding. In a (long and rambling) personal explanation to Parliament that followed news of the documentary, Peters alleged that businessman Cushing had offered alternative amounts of ‘$20,000, $30,000, and $50,000’ (quoted in Hames, 1995: p.143).

Peters later referred to his bribery allegations against Cushing outside of the House and thus without parliamentary privilege, leading Cushing to successfully sue for defamation. Peters was ordered to pay damages etc to Cushing of about $150,000.

One early exception to the reluctance of the wealthy to support New Zealand First is the example of the funding received from Bob Jones, who contributed $50,000 to the party in 1994 (Scherer, 1994b), another $50,000 to Peters’ Winebox legal fund, and then another $50,000 in 1995.

It seems that hotels have also been inclined to donate to New Zealand First – in 1999 for example, Redwood Hotel in Christchurch gave $10,000 to the Waimakariri electorate organisation of the party; Racecourse Hotel and Shades Tavern in Christchurch both gave $2000 and $5000, respectively, to the Ilam electorate organisation. And the party was even reported as receiving a $1000 donation from George Calvert Cleaners.

Other disclosed donations include: $10,000 from Contact Energy in 2003 and 2004, $10,000 from Westpac Trust in 2002, and $15,000 from Gold Times Sport in 2002. The Gold Times Sport trust was a pub pokie gambling operations. It was formerly known as Gold Times casinos trust, and was again later renamed the Tasman Trust after controversy involving alleged money laundering involving duplicitious payments that ended up back with the trust owners (Stickly, 21 Oct 2005).

In the 2002 election year, New Zealand First was reported as expecting to pull in at least $250,000 in donations for their campaign (O'Sullivan and Small, 29 Jun 2002).

The fishing industry

The New Zealand First party has also obtained some financial support from small-to-medium businesses. In the past, seafood companies in particular, appear to have been sympathetic; in 1999 the Ilam electorate organisation received $1000 from United Fisheries, the Waimakariri electorate received $1000 from Seafood Incorporated, and the Te Tai Tonga electorate obtained $4000 from Napier-based Tamatea Fisheries. $1500 was also received from Talley’s Fisheries, and $3000 from Independent Fisheries (Welham, 15 May 2002).

Nearly a decade later, allegations were made that the party had received large donations from Peter Simunovich, a heavyweight fisheries company owner. The allegations first arose in 2004 due to the fact that one of New Zealand First’s parliamentary advisers, ex-National MP Ross Meurant, was also working for Simunovich. A spokesman for Simunovich, refused to say if the businessman had given money to the party, but Peters responded by stating, ‘I'm saying no’ (quoted in NZPA, 6 August 2008).

Four years later, however, it was reported by The Dominion Post that a well-placed New Zealand First source revealed that the party ‘banked at least one cheque bearing the Simunovich name’ (NZPA, 6 August 2008).

At the time this was of especial interest because [Peters was involved in investigating the scampi fishing industry as part of a Select Committee inquiry that involved Simunovich Fisheries. A related scandal erupted over claims that Peters had been frequently dining for free at the Kermadec Restaurant which was part-owned by Simunovich. The allegation was made by a restaurant staffer who was quoted by TVNZ as saying ‘It was just generally known it was charged back to Simunovich Fisheries or to entertainment or however the accounting system worked’. This was also confirmed by other staff. Peters then took unsuccessful legal action against TVNZ.

Glenngate

It was rumoured in early 2008 that ex-pat Labour-supporting billionaire Owen Glenn had donated money to the New Zealand First party as well. This allegation was made after Glenn admitted to making donations to another political party in addition to Labour. The scandal became more interesting when Glenn refused to deny that he made the donation to New Zealand First, and then party president Dail Jones told the media that in December 2007 an anonymous donation of nearly $100,000 had been made to the party. Party leader Winston Peters subsequently denied the donation in very strong terms but refused to give clear answers to many related questions. Peters was later forced to admit that such a donation had in fact been made, but he denied the donation was made to either the party or to himself, but instead it went to his legal fund to pay off debt.

Owen Glenn’s political donations had already been under scrutiny, due to his request to Winston Peters to be appointed as the Government’s Honourary Consul to Monaco. Such diplomatic positions are paid only a nominal fee but are seen as highly desirable to businesspeople because they afford invaluable access to elected representatives, government officials, and other businesspeople.

Glenn made his initial request for the appointment to Mike Williams, who had dealt with Glenn over his Labour Party financial contributions. The request for the diplomatic post was duly given to the Prime Minister who, according to Glenn, approved the request and informed Winston Peters in his role as the Minister of Foreign Affairs. Glenn says that Clark told Peters to ‘get on with it’.

This was denied by Clark, who although refusing to answer many questions about the scandal, was willing to say that ‘I became aware that Mr Glenn had expressed an interest. Since becoming aware I discussed the matter with Mr Peters. Mr Williams has also talked to me about it’. The next step in the process was for Glenn to meet Peters, which he did at the Rugby World Cup in Paris. The two met over breakfast to discuss the possibility.

One problem for the Government with appointing Glenn was the fact that it had already ‘repeatedly turned down requests from Monaco's honorary consul in New Zealand for a reciprocal appointment in the principality’. It suddenly seemed odd that the Government would be appointing an Honorary Consul that had donated large amounts of money to the Labour and New Zealand First parties.

Reliance on backdoor parliamentary funding

Like the other small parties, New Zealand First makes very good use of state funding to carry out their extra-parliamentary activities. In the 2006-07 financial year, for example, the party received $798,000 in ‘party and members support’ from the Parliamentary Service, amongst other parliamentary and Ministerial Services funding. Such funding totally dwarfs New Zealand First’s private sources of money.

As David McLoughlin has pointed out, ‘Cash-strapped parties like New Zealand First…. would probably collapse without the parliamentary lifeline to covert public funding of their party machines’ (McLoughlin, 1997a: p.32). Moreover, it is also worth noting that in contrast to traditional parties, New Zealand First barely even present the façade of pretending to have a physical national office outside of Parliament’s office buildings. Tracking down the New Zealand First office is difficult, and their website only has parliamentary contact information. In addition, the parliamentary offices of the MPs now substitute as the meeting places for party organisation meetings and election strategising.

In terms of this backdoor state funding, parliamentary staffing has been one of the main benefits for New Zealand First. According to the Parliamentary Telephone Directory, July 2003, the party had a total of 31 staff funded by the Parliamentary Service. This total was made up of eight Executive Secretaries, nine in ‘Leaders Office, Media & Research’, and 14 in electorate offices. Since 2002 New Zealand First MPs have also shared secretaries, allowing the operation of a larger Leader’s Office and research unit (James, 2002k). Centralisation of financial resources under the control of Winston Peters is a very strong element of NZ First’s financial history.

One of the party’s MPs, Doug Woolerton, has also in the past doubled as the party president, effectively using the party’s parliamentary resources to run the party. Woolerton’s remuneration was paid for by the state, as was his travel regardless of whether or not he was travelling around the country on party presidential or parliamentary business.

The permitted use of parliamentary budgets was also stretched in 2003 by New Zealand First when it purchased dozens of high-visibility outdoor advertising billboards. The billboards featured pictures of Winston Peters with three fingers raised and the campaigning slogan: ‘Immigration’s up, Treaty costs up, crime’s up; had enough?’), and were estimated to cost about $180,000 (Milne, 2003b).

Then of course New Zealand First was cited by the Auditor-General as misusing $158,000 of parliamentary resources in the three-months leading up to the 2005 general election. The party refused to pay the debt back, and after a year of obfuscation then argued that the debt to the Parliamentary Service was annulled by the fact that the party had made a secret payment to a number of unnamed charities.

New Zealand First’s use of parliamentary resources wasn’t only controversial in the lead up to the 2005 general election, but also when Peters first established the party. Originally, the party recruited ex-National Party Cabinet minister Dr Ian Shearer, who with his wife Sheryl Shearer worked for Peters before resigning over the way that Peters was misusing parliamentary resources in his office. Dr Shearer resigned from the party in 1994 stating ‘I was no longer prepared to watch Mr Peters demand of others an accountability that he was unwilling to demand of himself’ (quoted in Laugesen, 28 October 1994: p1). As Hames explains, ‘The heart of the argument was whether taxpayers’ money intended for Peters’ Parliamentary business was instead being spent on party business’ (Hames, 1995: p.220).

New Zealand First’s position on state funding

Winston Peters and New Zealand First have always had an ambiguous or contradictory orientation towards the issue of the state funding of parties. As mentioned already, the party has been very reliant on indirect backdoor parliamentary state funding, but actually has an official position against the provision of direct state funding. When he was an MP with the party, Brian Donnelly explained, ‘It really runs contrary to the New Zealand way of viewing democracy and the whole political system’ (quoted in Milne, 24 Aug 2002). Peters has also stated that there are ‘deep-rooted principles involved’ and the party is ‘fundamentally opposed’ to such funding (Watkins, 14 April 2007). In fact Peters showed an insightful understanding of state funding of politics when he stated that more state funding would be ‘taking shortcuts to ensure a political oligarchy remained in power propped up by taxpayers money’ (Chapple, 15 April 2007).

Of course New Zealand First is also the recipient of direct state funding in the form of election broadcasting funds. Below are the allocations made to New Zealand First for the last five general elections:

Yet the issue of broadcast advertising funding has also been contentious for the party. When New Zealand First was formed in 1993 it did not qualify for advertising in the election of that year because the party had neither existed for a year nor been ‘electorally tested’. (The electoral laws meant that the party also couldn’t purchase it’s own advertising, meaning it was denied any right to participate in broadcast advertising at all).

When the state allocation was denied to New Zealand First, Peters declared that the party was actually opposed to the funding anyhow and would not have accepted it (Goulter, 1993: p.2; Shearer and Shearer, 1994: p.29). Yet in every subsequent election the party has accepted such funding, and its criticism has disappeared. In fact, in 1996 when New Zealand First was one of only four elected parties in Parliament, Peters argued that all other unelected parties should be excluded from Electoral Commission election funding (Edwards, 1996b).

Also, despite being formally against direct state funding, peters appears to strongly support indirect state funding being extended. This can be seen, first, in the fact that in November 2007 the party voted in favour of the controversial Appropriations Bill of November 2007 which validated both retrospective and future use of parliamentary funds for political electioneering. Deputy leader Peter Brown said: ‘We need the bill to protect us from the Auditor-General’s wisdom’.

Second, this favourability for increased indirect state funding can be seen in the fact that New Zealand First voted in October 2007 to increase the parliamentary funding of parties by 12%. As a result, the party’s Parliamentary Service budget for member support was increased by $128,000 per year.

New Zealand First orientation to donation disclosure

New Zealand First has played a key role in instituting the contemporary donation disclosure regime found in both the Electoral Act 1993 and the Electoral Finance Act 2007. In his Disclosure of Political Donations and Gifts Bill, New Zealand First leader Winston Peters proposed that parties and candidates be required to disclose all donations of $500 or more and identify the donors. In contrast, Labour proposed more moderate legislation that put the threshold at $350 for parties at the electorate level, and a threshold of $3500 for the national level. (In the end, a concession was made to National, whereby thresholds of $1000 and $10,000 were incorporated into the Electoral Act 1993).

This legislation for parties was passed in 1995, during the transition to MMP, when the political composition of Parliament was in flux and the National Government had lost its majority control on the Electoral Law Select Committee. In this situation New Zealand First attempted to amend the Electoral Reform Bill to make the disclosure of party funding compulsory – a move that gained the support not only of the Labour Party and Alliance, but of a number of ex-National Party MPs, such as Michael Laws.

Instituting and tigtening the donation disclosure regime was in line with Peters’ long established campaign of allegations about Labour and National being corrupted by the donations of big business. For example, Peters alleged that National’s industrial relations policy was actually written in 1987, 1988, and 1989 by the Roundtable (Scherer, 1995: p.3). Later, in 1999, Peters campaigned for the Electoral Commission to investigate a trust that had donated $50,000 to the National Party. Then in 2004, Peters alleged that donations to Labour and National from Telecom had led to the company’s monopoly positions being retained. National was also accussed in 2008 as being involved in ‘venal, corrupt politics’ and exchanging ACC policy for insurance industry donations.

In this way New Zealand First has been able to exploit the growing mood of anti-partyism in the electorate since the 1980s. To a large extent, Winston Peters’ success with the voters lay in their perception of him as the ultimate ‘anti-party-politician’. In creating his party, Peters was well aware of public disenchantment with politics, politicians and parties, and on this issue he very carefully positioned his party on the side of ‘the people’. Peters was also very careful to align himself with the anti-party mood, and his strong advocacy of political finance reform has been a key way of expressing this populism. (There are strong similarities in this with the faux-radical populism of Labour and Green parties’ strong advocacy of political finance reform.)

Not only has New Zealand First railed against political donations from big business, it also claims to run some sort of ethical donations regime by not accepting financial gifts from certain industries. For example, in 1993 it refused to accept a $1000 election donation from advertising agency Saatchi and Saatchi (NZ Herald, 1 Nov 1993). Then in 2002 Peters publicised the fact that he had ‘turned down a sizeable sum from the casinos on the principle that we cannot support hundreds of millions of dollars being sucked out of our economy by foreign owners’ (quoted in NZPA, 16 Sep 2002). He challenged Labour and National to declare their proceeds from gambling, stating ‘One wonders how much the casinos gave to political parties for their recent election campaigns…. We know, from our own experience, that they were offered substantial sums’ (quoted in NZPA, 16 Sep 2002). However, this ‘ethical’ donation regime didn’t preclude New Zealand First from accepting money from the tobacco industry – in 1996 the party received $15,000 from Rothmans New Zealand.

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The above is an early draft of a paper on the political finances of New Zealand First. Much more will be added to the next draft over the next few weeks. Any comments or additonal information is very welcome.

Comments

The finances of New Zealand First (draft)

In light of the recent exposé of New Zealand First’s dodgy donations from wealthy businesspeople, it’s worth taking an in depth look at the party’s financial history. Such an examination highlights the many dubious and unusual elements of the party’s operations, the extent to which New Zealand First is merely a fiefdom for its leader, the high secrecy involved, but also the extent to which the party is actually largely reliant on parliamentary funding for its existence. [Read an early draft below]